NY Relaxes 'Convenience of Employer
Test'

May 31, 2006 (PLANSPONSOR.com) - A new memorandum by
The New York State Department of Taxation and Finance could
mean that the state is softening its attitude toward
telecommuter workers, saying that the days a person works at
home will not be counted as New York days if the home office
is a "bona fide employer office."

The “convenience of employer test” holds
that all nonresident employees’ income from work done
at home in another state is taxable by New York, unless
the remote working is done for the employer’s
necessity,” not the employee’s
convenience.

Other states like Nebraska and Pennsylvania have
set similar rules, but New York is believed to be the
most austere enforcer of the “convenience”
test, according to the Wall Street Journal.

For tax years beginning on or after January 1, 2006,
the state’s tax department said in thememo
that taxpayers whose primary office in is New York State,
any normal work day spent at home “will be treated as
a day worked outside the state” if the home office is
a bona fide employer office. Any day spent at the home
office that is not a normal work day would be considered a
nonworking day.

The office must meet a “primary” test or
at least four “secondary” factors, plus some
other conditions. The primary test is that the home
office either contains, or is near, “specialized
facilities.”

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The secondary factors include that:

the home office is a “requirement or
condition of employment.”

the employer has a “bona fide business
purpose” for the employee’s home-office
location.

the employee performs some of the “core
duties” of the job at the home office.

the employee regularly and continuously meets
or deals with clients, patients or customers at the
home office.

the employer reimburses home-office
expenses.

the employer doesn’t provide the employee
with designated office space or other regular work
space at one of its regular offices.